Recommendation for a COUNCIL RECOMMENDATION on the economic policy of the euro area
Date: 2019-12-17
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: EU banking union, economic growth, economic reform, education policy, employment policy, euro area, investment policy, labour market, structural adjustment, vocational training

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   EUROPEAN COMMISSION  Strasbourg, 17.12.2019  COM(2019) 652 final  Recommendation for a COUNCIL RECOMMENDATION on the economic policy of the euro area {SWD(2019) 631 final}  
 
 
Recommendation for a 

COUNCIL RECOMMENDATION 

on the economic policy of the euro area 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 136 in conjunction with Article 121(2) thereof, 

Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of 
the  surveillance  of  budgetary  positions  and  the  surveillance  and  coordination  of  economic 
policies1, and in particular Article 5(2) thereof, 

Having  regard  to  Regulation  (EU)  No  1176/2011  of  the  European  Parliament  and  of  the 
Council  of  16  November  2011  on  the  prevention  and  correction  of  macroeconomic 
imbalances2, and in particular Article 6(1) thereof, 

Having regard to the recommendation of the European Commission, 

Having regard to the conclusions of the European Council, 

Having regard to the opinion of the Economic and Financial Committee, 

Having regard to the opinion of the Economic Policy Committee, 

 Whereas:  

(1) 

The  euro  area  is  continuing  its  expansion,  but  with  interconnected  risks  to  the 
outlook  and  uncertainty  on  the  horizon.  Moreover,  the  risk  of  a  further  prolonged 
period  of  low  growth  and  inflation  driven  by  anaemic  productivity  and  ageing 
populations looms. While the output gap has turned positive since 2017 and stood at 
0.7%  of  potential  GDP  in  2018,  potential  growth  is  set  to  remain  below  pre-crisis 
levels.3  Core  inflation  remained  in  the  1-1½  %  range  in  2018  and  is  forecast  to 
remain at some 1½% in 2019, 2020 and 2021. Labour market indicators continue to 
improve,  although  at  a  slower  pace,  and  employment  growth  is  projected  to  slow 
further  and  challenges  in  terms  of  job  quality  remain.  Nominal  wage  growth  has 
firmed, having reached some 2¼ % growth in 2018, after several years below 2.0%, 
and is projected at some 2½ % in 2019 and back to 2¼% in 2020-21. In spite of good 
labour  market  conditions,  real  wage  growth  has  increased  only  slowly  and  remains 
low,  at  below  1%  in  2018  and  2019  and  projected  at  0.7%  and  0.8%  for  2020  and 
2021  respectively.  The  euro  area  current  account  surplus  is  projected  to  narrow. 
Deficit  Member  States  narrowed  or  reversed  their  current  account  deficits,  even  if 
they continue to record large negative NIIPs.4 At the same time, some Member States 
continue to run persistently high current account surpluses and therefore continue to 
increase their net international investment positions (NIIP). Current account balance 
dynamics in the euro area are affected by weakening external demand, especially for 

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4 

OJ L 209, 2.8.1997, p. 1. 
OJ L 306, 23.11.2011, p. 25. 
All forecast figures in this document are from the European Commission Autumn 2019 forecast. 
European Commission (2019), Alert Mechanism Report 2020, COM(2019) 651 final. 

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(2) 

(3) 

(4) 

export-oriented Member States with high current account surpluses, which are highly 
dependent on foreign export demand. 

Increasing 
the  growth  potential  while  ensuring  environmental  and  social 
sustainability and driving real convergence among euro area Member States requires 
structural  reforms  to  enhance  sustainable  growth  and  investment  in  tangible  and 
intangible  capital  to  increase  productivity.  This  would  help  particularly  those 
Member States whose  growth potential is  clearly lower than the euro  area average. 
This would also be necessary in order to prevent the euro area economy from falling 
into a protracted period of low potential growth and productivity, low price inflation 
and wage growth as well as rising inequality. Reforms and investment remain crucial 
to  ensure  the  euro  area  relaunches  its  growth  momentum,  overcomes  stronger 
pressures  over  the  medium  to  long-term  stemming  also  from  deteriorating 
demographics,  and  facilitates  the  transformation  towards  a  sustainable  economy, 
helping  the  euro  area  and  its  member  states  to  achieve  the  United  Nations' 
Sustainable Development Goals.  

The economic impact of climate change, one of the biggest systemic risks facing the 
world  economy,  financial  systems  and  societies  today,  is  beginning  to  be  visible. 
Risks  to  the  global  economy  from  climate  change  and  more  broadly  from 
environmental degradation are increasingly present, and these will have an impact on 
the  most  vulnerable  in  our  societies.  If  not  accompanied  by  appropriate  measures, 
there  could  be  negative  consequences  on  the  resilience  of  our  economies,  on 
inclusiveness and on the long-term growth potential. In that context, investment and 
creating  the  regulatory  and  financial  conditions  for  an  orderly  transition  towards  a 
sustainable economy  would  be essential.  If tackled in  the  right  way,  environmental 
and  climate  challenges  are  also  an  opportunity  to  revitalise  the  European  economy 
towards sustainable development. In that direction, the Commission has put forward 
a  European  Green  Deal,  as  Europe’s  growth  strategy  which  will  include  the  first 
European Climate Law to enshrine the 2050 climate-neutrality target into law. At the 
same  time,  the  green  transition  will  need  to  take  the  impact  on  different  parts  of 
society  into  account.  Investment  to  facilitate  transformation  towards  a  sustainable 
economy  will  need  to  be  accompanied  by  investment  in  skills  and  support  for  job 
transitions  to  ensure  that  all  citizens  reap  the  benefits  of  technological  change, 
particularly  in  the  sectors  and  regions  lagging  behind  in  the  digital  and  green 
transitions.  

Mobilising public and private funds for investing in the green and digital transition 
can help to sustain growth in the short term and meet the long-term challenges facing 
our  economies.  While  the  digital  revolution  may  entail  opportunities  in  terms  of 
productivity, growth  and job creation, it may also raise challenges, in particular for 
less qualified workers, lacking skills to work with new technologies. Different speeds 
of transition  to  the digital  economy among euro area Member States  could  prove a 
significant  risk  to  convergence  and  macroeconomic  stability.  This  could  be 
reinforced by strong agglomeration effects, often benefiting large cities and winner-
takes-all  dynamics  that  are  often  present  in  the  area  of  digital  technologies,  which 
can add to inequality and have adverse impact on convergence.  Investments should 
be  geared  towards  generating  research  and  innovations  but  also  towards  wider 
diffusion of innovations across the economy.   

(5) 

A more coordinated investment strategy coupled with a stronger reform effort at euro 
area  level  would  be  instrumental  to  support  growth  and  respond  to  the  long-term 
challenges  such  as  the  climate  transition  and  technology  transformation.  The 

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in 

the  climate  and 

Budgetary  Instrument  for  Convergence  and  Competitiveness,  to  be  included  in  the 
Reform  Support  Programme, would provide financial support to  euro area Member 
States for the implementation of reform and  investment packages. InvestEU, which 
will also contribute to the Sustainable Europe Investment Plan, also aims to trigger at 
least  EUR  650  billion  in  additional  investment  to  further  foster  innovation  and  job 
creation in the EU, including by financing sustainable infrastructure. Cohesion policy 
funds, which play a crucial role in supporting our regions and rural areas, also play a 
role 
transition  by  promoting  sustainable 
development.  The  European  Investment  Bank  already  dedicates  25%  of  its  total 
financing to climate investment, and has announced its intention to double this share. 
To  achieve  the  Union’s  sustainability  objectives,  it  would  be  essential  to  carry  out 
investment  projects  at  national  and  sub-national  level  that  cover  climate  adaptation 
and  mitigation,  energy  transition,  decarbonisation  or  the  circular  economy. 
Investment in network industries and infrastructure can help improve the euro area’s 
competitiveness  and  foster  the  transition  to  more  sustainable  transport.  In  addition, 
investments in intangible assets such as research and development and skills would 
be key to prepare the euro area labour market for the challenges ahead.  

technological 

(6) 

(7) 

(8) 

The effects of the economic expansion over the last years have not been felt  evenly 
within  Member  States  and  across  regions  and  countries.  While  disposable  income 
levels  have  recently  risen,  they  remain  below  pre-crisis  levels  in  several  euro  area 
Member  States.  The  number  of  people  at  risk  of  poverty  and  social  exclusion  is 
declining  in  most  Member  States,  and  is  now  5  million  below  the  2012  peak,  but 
remains  above  2008  levels  in  the  euro  area.  Following  a  period  of  increased 
divergences, some Member States have converged towards the highest performers in 
GDP-per-capita over the past  few  years. However, the share of income held  by the 
highest income levels has slowly increased in the past decade, and large divergences 
remain  between  Member  States.    In  order  to  promote  upwards  convergence  within 
and  across  Member  States,  it  would  be  important  to  promote  policies  that  aim  at 
increasing  both  efficiency  and  equity,  in  line  with  the  Sustainable  Development 
Goals.  They  result  in  better  macroeconomic  outcomes  with  more  equally  shared 
benefits for society at large, that also help boost the cohesion of the euro area. 

Consistency  and  balance  in  the  macroeconomic  policy  mix  of  the  euro  area, 
including  monetary,  fiscal  and  structural  policies,  are  crucial  to  ensure  robust, 
inclusive  and  sustainable  economic  growth  and  to  respond  effectively  to  persistent 
low  inflation,  a  weakening  outlook  and  risks  to  long-term  growth.  The  European 
Central  Bank  is  maintaining  an  accommodative  monetary  policy  to  help  inflation 
edge towards its  medium-term  inflation objective, while supporting growth and job 
creation.  Fiscal  policy  needs  to  complement  the  monetary  policy  stance,  as  are 
structural reforms across different sectors, including those necessary to complete the 
architecture of the Economic and Monetary Union (EMU). 

Coordination  of  national  fiscal  policies  in  full  respect  of  the  Stability  and  Growth 
Pact, while taking into account available fiscal space and spillovers across countries, 
supports the proper functioning of the EMU. The euro area fiscal stance is expected 
to be broadly neutral to  slightly expansionary in  2020 and 2021. At the same time, 
national  fiscal  policies  remain  insufficiently  differentiated  in  light  of  the  available 
fiscal  space  in  Member  States.  The  pursuit  of  prudent  fiscal  policies  by  Member 
States  with  high  levels  of  public  debt  would  put  public  debt  on  a  downward  path, 
reduce  vulnerability  to  shocks,  and  allow  for  the  full  functioning  of  automatic 
stabilisers in the event of an economic downturn. On the other hand, further boosting 

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(9) 

(10) 

investment  and  other  productive  spending  in  Member  States  with  a  favourable 
budgetary situation would support growth in the short and medium term, while also 
helping  to  rebalance  the  euro  area  economy.  In  case  of  a  worsening  outlook, 
achieving a supportive fiscal stance at the aggregate level that focuses on productive 
spending,  while  pursuing  policies  in  full  respect  of  the  Stability  and  Growth  Pact, 
taking  into  account  country-specific  circumstances  and  avoiding  pro-cyclicality  to 
the extent possible, is important to sustain growth in the short term.  

Fiscal  structural  reforms  remain  crucial  for  improving  fiscal  sustainability, 
strengthening growth potential and allowing for effective fiscal policies in the event 
of  a  downturn.  Well-functioning  national  fiscal  frameworks,  together  with  regular 
and thorough spending reviews and effective and transparent public procurement can 
strengthen  the  efficiency  and  effectiveness  of  public  expenditure  and  improve  the 
credibility  and  quality  of  fiscal  policies.  Improving  the  composition  of  national 
budgets,  on  both  the  revenue  and  expenditure  sides,  including  shifting  resources 
towards  investment  by  setting  up  public  investment  strategies,  would  increase  the 
growth  impact  of  public  budgets,  raise  productivity  and  begin,  meeting  the  urgent 
long-term  challenges  of  the  green  and  digital  economies.  Simplifying  and 
modernising  tax  systems  and  addressing  tax  fraud,  evasion,  and  avoidance  namely 
through  measures  against  Aggressive  Tax  Planning,  are  essential  to  making  tax 
systems  more efficient  and fairer. The ease with  which mobile resources  can move 
within  the  euro  area  increases  the  scope  for  tax  competition.  Coordination  among 
Member  States  is  therefore  essential  to  address  profit-shifting,  excessive  tax 
competition  and  an  overall  race  to  the  bottom  in  terms  of  corporate  taxation.  An 
agreement for a Common Consolidated Corporate Tax Base as well as an agreement 
to  review  profit  allocation  among  countries  and  ensure  minimum  effective  taxation 
would be instrumental in this endeavour. The tax burden in the euro area is relatively 
high and skewed towards labour, with property or environmental taxes representing a 
very small share of tax revenues. The two latter, however, can be less detrimental to 
growth and labour supply  and demand  and can contribute to  sustainable  growth  by 
incentivising “greener” behaviour by consumers and producers. Taxation would need 
to take better into account the climate dimension and address emissions and carbon 
leakage more consistently. Therefore, in order to help transitioning towards a green 
economy,  fostering  the  design  of  budgetary  policies  conducive  to  environmental 
commitments  and  a  review  of  the  Energy  Taxation  Directive  will  be  proposed,  as 
well as a Carbon Border Adjustment Mechanism if needed to avoid carbon leakage 
and keep the level playing field with third countries firms.  

Structural  and  institutional  reforms  that  increase  competition  in  product  markets, 
promote  resource  efficiency,  improve  the  business  environment  and  the  quality  of 
public administrations,  including the  effectiveness  of justice systems,  are important 
for the resilience of euro-area Member States. Resilient economic structures prevent 
shocks from having significant and long-lasting effects on income and labour supply 
and  can  facilitate  the  operation  of  fiscal  and  monetary  policy  and  contain 
divergences,  particularly  in  downturns,  creating  more  favourable  conditions  for 
sustainable  and  inclusive  growth.  Better  coordination  and  implementation  of 
the  country-specific 
structural 
recommendations,  can  create  positive  spillovers  across  Member  States.  In  that 
respect, the National Productivity Boards can play an important role in increasing the 
reform  ownership  and  improving  implementation.  Reforms  are  also  needed  to  face 
urgent  long-term  challenges  such  as  the  climate  transition  and  technological 
transformation.  Deepening  Single  Market  integration,  which  has  proven  to  be  a 

those  prescribed 

in  particular 

reforms, 

in 

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(12) 

(13) 

major engine of growth and convergence between Member States can also contribute 
to fostering productivity growth. 

The  European  Pillar  of  Social  Rights  sets  out  twenty  principles  to  foster  equal 
opportunities  and  access  to  the  labour  market,  fair  working  conditions  and  social 
protection and inclusion. It is designed as a compass to promote upward convergence 
towards  better  working  and  living  conditions.  Stronger  and  more  inclusive 
economies  and  societies  can  in  turn  foster  the  resilience  of  the  Union  and  the  euro 
area.  Reforms  and  investment  in  skills,  job  transitions  and  more  effective  social 
protection are also important to accompany a just and fair transition towards a green 
and  digital  economy.  The  full  implementation  of  the  pillar  at  all  levels  with  due 
regard for respective competences will be essential to promote upward convergence.  

Reforms  that  increase  labour  market  participation,  promote  quality  job  creation, 
support successful labour market transitions, reduce segmentation and promote social 
dialogue  can  help  boost  inclusive  growth,  improve  economic  resilience  and 
automatic stabilisation, reduce inequalities, and address poverty and social exclusion. 
Individualised job transition support, training and requalification are key to promote 
the  timely  reinsertion  of  job-seekers.  Access  to  high-quality  education  and  training 
throughout  the  life  cycle  requires  adequate  investment  in  order  to  improve  human 
capital and skills, also in light of the digital and green transition. This contributes to 
improving employability, productivity, innovation capacity and wages in the medium 
and  longer  term,  increasing  the  resilience  of  the  euro  area.  Employment  protection 
legislation needs to  provide for fair and decent  working  conditions  for all workers, 
especially  in  view  of  emerging  atypical  forms  of  employment  bringing  along  new 
opportunities  but  also  challenges  related  to  job  security  and  social  protection. 
Effective  and  sustainable  social  protection  systems  are  also  crucial  to  ensure 
adequate  income  and  access  to  quality  services.  Pension  reforms  and  work-life 
balance policies can importantly foster labour market participation, safeguarding the 
long-term  sustainability  of  European  welfare  systems.  A  shift  away  from  labour 
taxation could usefully focus in particular on low income and second earners. Social 
partners’  involvement  in  employment,  social  and  economic  reforms  is  crucial  to 
strengthen ownership and support reform implementation. 

The robustness of the euro area financial sector has increased since the crisis, though 
vulnerabilities  remain.  Corporate  and  household  debt  remains  high  in  several 
countries, and in many cases, national tax systems still feature a debt bias. The need 
to  adapt  banks'  business  models,  the  low-interest-rate  environment  and  increasing 
competition  from  other  forms  of  finance  continue  to  exert  pressure  on  banks' 
competitiveness. There has been sustained progress in risk reduction, notably on non-
performing loan (NPL) reduction. Nonetheless, where NPL ratios remain rather high 
they  require  further  sustained  efforts,  and  all  Member  States  should  put  in  place 
appropriate  policies  to  prevent  the  build-up  of  NPLs.  In  March  2018,  the 
Commission presented a risk-reduction package both  to  facilitate addressing legacy 
NPLs and to avoid their future build-up. As part of the legislative measures on NPLs, 
a  Regulation  was  adopted  in  April  2019,5  which  introduces  a  ‘statutory  prudential 
backstop’ in order to prevent the risk of under-provisioning of future NPLs; further 
progress  should  be  made  to  continue  tackling  the  issue  of  NPLs,  in  particular  by 

5  Regulation (EU)  2019/630 of  the  European  Parliament  and  of  the  Council of  17  April  2019  amending 
Regulation  (EU)  No  575/2013  as  regards  minimum  loss  coverage  for  non-performing  exposures  OJ  L  111, 
25.4.2019, p.4. 

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(15) 

(16) 

progressing with  the draft Directive on NPLs secondary markets.  As highlighted in 
the  Commission  reports  on  anti-money  laundering  issued  in  July  20196,  a  more 
comprehensive approach to fighting money laundering and the financing of terrorist 
activities is  needed in  the Union to  address  structural  shortcomings identified. This 
requires,  in  particular,  a  better  enforcement  of  the  rules  and  better  supervision 
through more unified EU action. 

The  establishment  of  the  Banking  Union  has  progressed,  including  through  the 
agreement on the operationalisation of a common backstop for the Single Resolution 
Fund,  but  it  remains  unfinished.  A  High  Level  Working  Group  was  set  up  to 
continue  technical  work  towards  the  launching  of  the  political  negotiations  for 
establishing  a  European  Deposit  Insurance  Scheme  (EDIS).  This  work  needs  to  be 
completed  given  the  significance  of  EDIS  for  the  steady-state  Banking  Union  and 
within  the  broader  EMU  architecture,  which  calls  for  addressing  all  the  relevant 
elements  to  favour  the  stability  and  efficiency  of  the  European  banking  sector. 
Finally,  the  Commission  delivered  on  all  of  the  actions  announced  in  the  Capital 
Markets  Union.  However,  concrete  support  on  specific  legislative  files  has 
sometimes been lacking and renewed efforts are needed to remove the legal, tax and 
regulatory obstacles to the establishment of a Capital Markets Union, in particular as 
regards the rules on access to finance, insolvency, supervision and tax divergences, 
and to achieve a more effective EU supervision.  The role and functioning of national 
government  bond  markets  needs  to  be  assessed  also  to  address  the  so-called  bank-
sovereign nexus. 

Strengthening  the  architecture  of  the  EMU  requires  delivering  on  the  actions 
identified  in  the  Statement  of  the  Euro  Summit  of  December  2019  as  a  matter  of 
priority, but also on Commission proposals setting further steps towards completing 
the  EMU.  The  June  2019  Communication  on  Deepening  Europe’s  Economic  and 
Monetary  Union:  Taking  stock  of  four  years  after  the  Five  Presidents’  Report 
presents the state of play and outline areas where reform efforts should focus in the 
short and medium term. There has been some progress on the economic union, with a 
for  Convergence  and 
political  agreement  on 
Competitiveness for the euro area. Discussions on improving the European Stability 
Mechanism’s toolkit and revising its Treaty are ongoing. However, there have been 
no  discussions  in  the  Council  on  a  euro  area  fiscal  stabilisation  function  nor 
reforming  the  governance  of  the  euro  area.  The  Commission  intends  to  propose  a 
European  Unemployment  Benefit  Reinsurance  Scheme  in  order  to  better  protect 
citizens in cases of economic shocks. 

the  Budgetary 

Instrument 

Completing  the  EMU  would  result  in  better  macroeconomic  outcomes.  An 
incomplete  EMU  impedes  financial  integration.  This  limits  financing  opportunities 
for much-needed investment to foster an inclusive, productive, sustainable and stable 
economy.  An  incomplete  EMU  also  hinders  the  smooth  transmission  of  monetary 
policy  across  the  euro  area  and  limits  Europe’s  ability  to  determine  its  economic 
destiny.  In  addition,  the  lack  of  a  central  fiscal  stabilisation  function  significantly 
weakens  the  euro  area’s  counter-cyclical  fiscal  capacity.  Additionally,  the  move 
intergovernmental  solutions  has  not  been  matched  by  appropriate 
towards 
accountability  at  EU  level.  Therefore,  improvements  in  the  governance  of  the  euro 

6  Communication COM (2019) 360 final  from the Commission to the European Parliament and the Council of 
24 July 2019 towards better implementation of the EU's anti-money laundering and countering the financing of 
terrorism framework. 

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instrumental 

area  bodies  would  be 
increase  democratic  accountability. 
to 
Strengthening  the  EMU  is  key  to  enhance  the  clout  of  Europe  in  the  world,  to 
develop  the  international  role  of  the  euro  and  to  contribute  to  an  open,  multilateral 
and rules-based global economy. It is important that discussions continue to be held 
in  an  open  and  transparent  manner  towards  non-euro  area  Member  States,  fully 
respecting the Union’s internal market. 

HEREBY  RECOMMENDS  that  euro  area  Member  States  take  action,  individually  and 
collectively within the Eurogroup, in the period 2020–2021 to: 

1. 

2. 

3. 

4. 

In  euro  area  Member  States  with  current  account  deficits  or  high  external  debt, 
pursue  reforms  to  boost  competitiveness  and  reduce  external  debt.  In  euro  area 
Member  States  with  large  current  account  surpluses,  strengthen  the  conditions  that 
support  wage  growth,  while  respecting  the  role  of  social  partners,  and  implement 
measures  that  foster  public  and  private  investment.  In  all  Member  States,  foster 
productivity  by  improving  the  business  environment  and  the  quality  of  institutions, 
enhance  resilience  by  improving  the  functioning  of  goods  and  services  markets 
especially  by  deepening  the  Single  Market.  Support  a  fair  and  inclusive  transition 
towards  a  competitive  green  and  digital  economy  through  tangible  and  intangible 
investment, both public and private.  

In  Member  States  with  high  debt  levels,  pursue  prudent  policies  to  put  public  debt 
credibly on a sustainable downward path. In Member States with a favourable fiscal 
position,  use  it  to  further  boost  high-quality  investments.  In  case  of  a  worsening 
outlook,  deliver  a  supportive  fiscal  stance  at  the  aggregate  level,  while  pursuing 
policies in full respect of the Stability and Growth Pact, taking into account country-
specific circumstances and avoiding pro-cyclicality to the extent possible, and stand 
ready to coordinate policies in the Eurogroup. Improve the effectiveness of national 
fiscal  frameworks  and  the  quality  of  public  finances  and  adopt  growth-friendly  tax 
and  other  relevant  budgetary  measures  that  foster  a  sustainable  economy.  Support 
and implement EU actions to combat Aggressive Tax Planning and address a race to 
the bottom in corporate taxation.   

Strengthen  education  and  training  systems  and  investment  in  skills.  Increase  the 
effectiveness of active labour market policies that support labour market integration 
and  successful  labour  market  transitions,  including  to  more  digital  and  green  jobs. 
Promote participation in the labour market, including that of women, and shift taxes 
away  from  labour,  in  particular  for  low-income  and  second  earners.  Foster  quality 
job  creation,  fair  working  conditions  and  address  labour  market  segmentation. 
Improve  access  to  adequate  and  sustainable  social  protection  systems.  Enhance  the 
effectiveness of social dialogue and promote collective bargaining.  

Complete  the  Banking  Union  by  starting  political  negotiations  on  the  European 
Deposit  Insurance  Scheme,  taking  steps  to  improve  crisis  management  and  making 
provisions for liquidity in resolution and the backstop for the Single Resolution Fund 
operational.  Strengthen  the  European  regulatory  and  supervisory  framework, 
including by reinforcing the supervision and enforcement of anti-money  laundering 
rules.  Promote  orderly  deleveraging  of  large  stocks  of  private  debt  including  by 
removing debt bias in taxation. Continue to enable the swift reduction of the level of 
nonperforming  loans  by  banks  in  the  euro  area  and  prevent  their  build  up.  Renew 
efforts to complete the Capital Markets Union. 

5. 

Make  ambitious  progress  on  deepening  the  Economic  and  Monetary  Union, 
delivering swiftly on the actions identified in  the Statement of the Euro  Summit of 

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December 2019 and advancing on all other aspects with the perspective to strengthen 
the international role of the euro and to project Europe’s economic interests globally. 
Deepen 
its  democratic 
accountability while fully respecting the Union’s internal market and in an open and 
transparent manner towards non-euro area Member States. 

the  Economic  and  Monetary  Union  and  enhance 

Done at Strasbourg, 17.12.2019 

For the Council 
The President 

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